Is the party over for diesels?

The reputation has always been "You can't kill a diesel engine." But Volkswagen's newly unmasked deceit - rigging  VW and Audi diesel-powered vehicles to behave differently and hide the noxious fume output during emission tests – will likely set back U.S. sales of diesel-powered cars to zilch for another ten years, as VW is far and away the leading marketer of the technology here.

For the moment, VW is pulling all 2015 and 2016 "TDI" (turbocharged direct injection) diesel models from sales lots – a dramatic and costly move as  these so-called  "clean diesels" accounted for 23 percent of U.S. VW sales in August.  (Not so much in Audi land).

The carmaker also faces a major dilemma in fixing 482,000 diesel cars sold since 2009,  undone by telling road tests conducted by West Virginia University and the California Air Resources Board (on behalf of  the EPA) which showed VWs emitting nitrogen oxide at levels 30 to 40 times higher than the regulatory standard.

The pity is that diesels have always had lots going for them, reason why most long-haul truckers run on diesel power and 50 percent of European car owners – stung with much higher fuel prices – opt for a diesel. There's great torque (pickup power) from a stop in a diesel engine car.  Mileage per gallon  is far superior  to that with gasoline. Diesel engines have fewer parts (not needing a high voltage ignition system, for instance) and are far more durable. In part that's because diesel fuel has superior lubricating properties and the engines run cooler.

When I was a kid (and we're talking mid-20^th century dark ages) my eccentric neighbor who drove a Mercedes Benz diesel often bragged about a legendary Benz that had gone "almost a million miles without needing an engine overhaul." This guy - an iconoclastic architect named Newcomb Montgomery - also gloated lots about how "cheap" diesel fuel was at the pump and because his engine was converting "a larger share of fuel to actual power."

On the downside, diesel fuel then was so sludgy Mr. Montgomery had trouble starting the engine on a cold winter's morn. The engine clattered like it was loaded with marbles. The blast of soot and stinky smell coming out of the tail pipe was disgusting.

Fast forward to the early 2000s. Diesel fuel producers are ordered by the U.S. government to clean up their refining ways to reduce the sulfur content (rationalizing a major increase in price at the pump.) At the same time Euro car makers (and parts suppliers like Bosch)  have "breakthroughs"  reducing diesel engine rumble and scrubbing (they claimed) the exhaust fumes with fancy filtering technology.

Three years ago, I encouraged my then wife to invest in an Audi A3 TDI. An inner city commuter, basically just crossing from one end of town to the other at 20-35 mph, she certainly liked her new car but not the "check engine" light that kept coming on. After a couple months in and out of the shop, the dealer told her she "wasn't the right customer" for the ride, that a diesel "needs to be driven at highway speed regularly to blow out residue."  I don't think it was the cause of our marital breakup, but it did result in a lemon lawsuit, then a "sealed settlement" that included swapping the vehicle for a gasoline-powered car.

I swore off diesels then. And now, if diesel cars are tamed with honest pollution filtering and the pickup/mileage performance (likely) suffers, it may be everyone else's turn.

Wharton Legal Studies and Business Ethics Professor Thomas Donaldson agrees. "If it turns out that other diesel car makers have also been fudging the truth, the requirements will be tougher, harder and more expensive to fulfill. That will drive diesels out of the middle to low market in Europe and the rest of the world, as well as the U.S. And the class action results will be devastating. Do a back of the napkin calculation: if the car emissions problem is  fixed and you are then cheated out of ten miles a gallon, that's 170 gallons a year, times half a million vehicles on the U.S. roads. That's twenty billion dollars, even before punitive damages which can be triple."